TMI Blog2024 (3) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... Admittedly, in the instant case, the bid amount is more than Rs.200 lacs and, therefore, the bidder was required to show a minimum financial turnover equivalent to 75% of the amount put to bid. He was further required to show that at least 50% of such financial turnover which is equivalent to 75% of the bid amount is from civil engineering construction works. The bidder was also required to show that he had satisfactorily completed, as prime Contractor or sub-contractor, at least one similar work equal in value to one-third of the estimated cost of work of any Government/Semi Government Department (excluding maintenance cost for five years) for which the bid was invited. The official respondents are fair in admitting before this Court that they did not take into consideration the turnover certificate issued by the Chartered Accountant on 23.12.2022 in respect of five years i.e 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022. The official respondents have, however, failed to explain by giving any cogent reason as to why and how the certificate dated 23.12.2022 which as per the official respondents was not admissible to be considered, has been relied upon to import the execution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAG Mr. Sunil Sethi Sr. Advocate with Mr. Ravi Abrol Advocate. JUDGMENT 1. The extraordinary writ jurisdiction conferred on this Court under Article 226 of the Constitution of India is invoked by the petitioner-firm for issuance of a writ, an order or a direction in the nature of certiorari quashing the decision of respondents 1 to 4 [ the official respondents ] taken on 24.12.2022 vide No. CEJ/PMGSY/27462, issuing Revised Summary of Technical Evaluation Report in respect of work for up-gradation of road from T01 Sira to Shivgali, Package No. JK14-3008, PMGSY-III, Batch No. I of 2022-23, Block Latti, District Udhampur Length-32.150 kms [ the subject work ]. A further writ or direction in the nature of mandamus is sought against the official respondents for restraining them from opening the financial bid or to proceed further in pursuance of e-NIT No. CEJ/PMGSY/723 of 2022-23 dated 14.11.2022. Factual matrix: 2. Vide e-NIT issued on 14.11.2022, the official respondents invited bids for various developmental projects across the UT of Jammu and Kashmir which also included the subject work. The petitioner-firm, being eligible in terms of the e-NIT, participated in the tendering process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was fulfilling the qualifying criteria laid down in SBD. 5. It seems that upon consideration of complaint made by respondent No. 5, the matter was reconsidered by the Technical Evaluation Committee. The respondent No. 5 was declared responsive and consequently, Revised Summary of Technical Evaluation Report was put on e-procurement portal. It is this change of decision made and published by the Technical Evaluation Committee in the form of Revised Summary of Technical Evaluation Report dated 24.12.2022, the petitioner is aggrieved of and has challenged the same in the instant petition. The pleadings and submissions of parties: 6. The impugned decision of the Technical Evaluation Committee headed by Chief Engineer, PMGSY, Jammu is assailed by the petitioner primarily on the following grounds: (a) That the decision of the Technical Evaluation Committee and issue of revised summary of technical evaluation report in respect of respondent No. 5 changing its status from non-responsive to responsive bidder is arbitrary, unfair and in violation of the mandatory terms and conditions of e-NIT; (b) That the publication of technical evaluation summary wherein the petitioner was shown responsiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of this Court to judicially review the decision of Technical Evaluation Committee consisting of experts and other related issues, it is also argued that the documents uploaded by respondent No. 5 with regard to its financial status and capability to execute the work clearly depict substantial compliance of the terms and conditions of the contract. It is also the plea taken by respondent No. 5 that bearing of UDIN on the annual turnover certificate for all the five years was not a mandatory condition of contract and, therefore, the decision of the Technical Evaluation Committee taken on 24.12.2022 waiving the directory condition cannot be interfered with by this Court in exercise of its extraordinary writ jurisdiction. It is also argued that in view of huge difference between the bids submitted by the petitioner and respondent No. 5, if the contract is permitted to be allotted to the petitioner, it would cause huge loss to the public exchequer, in that, the official respondents will have to shell out more than 20 lacs above the bid/rates quoted by respondent No. 5. 9. Aside the aforesaid pleadings of the parties, there is a supplementary affidavit filed by the Managing Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, in respect of another work i.e upgradation of road from Dansal to Assar via Lalhote etc., the Technical Evaluation committee declared respondent No. 5 as responsive bidder and the petitioner as non-responsive bidder. The bid of the petitioner was declared non-responsive on the ground that the petitioner-firm had attached/uploaded audit reports of four years instead of last five financial years of the second JV Partner which, in any case, is not the requirement of clause 4.4B(a) III (e). It is pointed out that bid of respondent No. 5 was declared responsive despite the fact that it had not uploaded the annual turnover certificate bearing UDIN issued by the Chartered Accountant for the last five years. The dispute is stated to be pending adjudication in this Court in a separate petition. 12. The supplementary affidavit filed by the petitioner is responded to by the official as well as the private respondent. In reply to the supplementary affidavit, it is submitted that the mandatory requirement of any contract, including the contract in question, is the financial capacity of the bidder to execute the work. This is so clearly laid down in clause 4.6 of the SBD. The bid capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Chartered Accountants of India with breakup of civil works and total works excluding GST/VAT in each financial year (clause 4.4 of ITB)(pdf). Without UDIN the certificate will not be entertained and the bid rejected. (b) . (c) (d) (e) (f) Audit reports under Income Tax Act (3CA/3CB along with 3CD reports/(whichever applicable) for the last five financial years. (g) (h) The successful bidder will have to provide the original documents (from a to g) duly certified by a Chartered Accountant before a work is allotted to him. Any certificate issued by the Chartered Accountant should mandatorily bear UDIN. 4.3 Joint Ventures: For bids valuing Rs. 10.00 crores and above. (a) (b) (c) (d) e) (f) (g) (h) . 4.4A To qualify for award of the contract, each bidder should have in the last five financial years: (a) Achieved in any one financial year, a minimum financial turnover (as certified by chartered accountant, and at least 50% of which is from civil engineering construction works) equivalent to amount given below: (i) 60% of amount put to bid, in case the amount put to bid is Rs. 200 lakhs and less. (ii) 75% of amount put to bid, in case the amount put to bid is more than Rs. 200 lakhs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the bidding documents, without material deviation or reservation. A material deviation or reservation is one (a) which affects in any substantial way the scope, quality or performance of the works; (c) which limits in any substantial way, inconsistent with the bidding documents, the Employer s rights or the Bidder s obligations under the contract; (c) whose rectification would affect unfairly the competitive position of other bidders presenting substantially responsive bids. 25.3 16. It is in light of the aforesaid relevant clauses of ITB, this Court is required to examine the grievance projected by the petitioner in this petition vis- -vis the decision of the official respondents dated 24.12.2022, issuing revised summary of technical evaluation report and declaring respondent No. 5 responsive for participating in the price bid for the subject work. 17. Having heard learned counsel for the parties and perused the material on record, I am of the view that the decision of this petition would turn on the determination of following two issues:- (i) Whether the requirement of uploading annual turnover certificate issued by the Chartered Accountant for the last five financial years bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Chartered Accountant shall be entertained if the same was not bearing UDIN and the bid shall be rejected. It is in the light of these clauses, the bids of the eligible bidders were considered. Indisputably, the certificate of five years turnover submitted by respondent No. 5 does not meet the requirements stipulated in clause 4.2 (III)(a) read with clause 4.4 (a) III(a) of ITB. 19. Regard being had to the mandatory nature of requirement which is reiterated in two more clauses, the Technical Evaluation Committee in its decision taken on 20.12.2022 declared respondent No. 5 as non-responsive . 20. True it is that clause 22.6 reproduced hereinabove gives time of five working days to the aggrieved bidder to lodge his complaint against any adverse decision of the Technical Evaluation committee in respect of his bid. Respondent No. 5 availed of this opportunity and lodged its complaint. 21. From a reading of the complaint dated 23.12.2022, which is placed on record by respondent No. 5 with his objections, it is evident that respondent No. 5 sought review of the decision primarily on the ground that the latest turnover issued by the Chartered Accountant on 19.09.2022 was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udit report signed by the Chartered Accountant along with the financial turnover certificate issued without UDIN for all the five financial years i.e 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022. Since the annual turnover certificate for the requisite five financial years issued by the Chartered Accountant without bearing mandatory UDIN was required to be excluded from consideration, as such, it was not just and fair on the part of the Technical Evaluation Committee to read the said annual turnover certificate into an income tax audit report submitted by respondent No. 5 in terms of clause 4.2 (III)(f) of the ITB. The official respondents are fair in admitting before this Court that they did not take into consideration the turnover certificate issued by the Chartered Accountant on 23.12.2022 in respect of five years i.e 2017-18, 2018-19, 2019-20, 2020-21 and 2021-2022. The official respondents have, however, failed to explain by giving any cogent reason as to why and how the certificate dated 23.12.2022 which as per the official respondents was not admissible to be considered, has been relied upon to import the execution of requisite volume of civil work into the tax audit repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate from the Chartered Accountant for the last five financial years submitted/uploaded by the respondent No. 5 does not bear UDIN of Institute of Chartered Accountants of India. The one year s certificate pertaining to the financial year 21-22 which is issued by the Chartered Accountant in form 3 CB under section 44 AB(a) of the Income Tax Act is only a GST and tax audit report and cannot be termed as annual financial turnover certificate . The other five years turnover certificate submitted by respondent No. 5 for the last five financial years including the financial year 21-22 does not bear UDIN and, therefore, is required to be kept out of consideration. As a matter of fact, stand of the official respondents is that though they have not taken into consideration aforesaid certificate, yet have found respondent No. 5 substantially responsive in terms of clause 4.4 A of SBD. 29. I have already explained that the manner in which respondent No. 5 has been sought to be declared responsive by riding on illusionary interpretation of the clause by the official respondents smacks of total unfairness, arbitrariness and biased nature of decision. Although, the tax audit certificate for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the similar business for the last five financial years. The annual turnover certificate for the last five financial years is also a document in the hands of Technical Evaluation Committee to verify the veracity and correctness of the certificate to be furnished as per the format shown in Section 3 Qualification Information. As is provided in clause 4.4A of ITB, the bidder is required to submit a certificate to the effect that he has satisfactorily completed at least one similar work equal in value to one-third of the estimated cost of work of any Government/Semi Government Department for which the bid is invited or such higher amount as may be specified in appendix to ITB during the last five financial years excluding this work. 33. It is true that to qualify for award of contract, the bidder is required to show that he has achieved in any one of the last five financial years, a minimum financial turnover of which 50% is from civil engineering construction work, equivalent to the amount of 75% of the bid amount where the bid amount is more than 200 lakhs, yet the requirement of submission of annual audit reports of five financial years cannot be dispensed with. The Technical E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be applied where it is possible for all the parties to comply with all such conditions fully; (iii) if, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing; (iv) the parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance with another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be relaxed and thus the same was wholly illegal and without jurisdiction; (v) when a decision is taken by the appropriate authority upon due consideration of the tender document submitted by all the tenderers on their own merits and if it is ultimately found that successful bidders had in fact substantially complied with the purport and object for which essential conditions were laid down, the same may not ordinarily be interfered with;... 16. We also agree with the contention of Shri Raval that the writ jurisdiction cannot be utilised t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has enumerated some principles in para 66, which, for facility of reference is reproduced below:- 66. We are also not shutting our eyes towards the new principles of judicial review which are being developed; but the law as it stands now having regard to the principles laid down in the aforementioned decisions may be summarized as under : i) If there are essential conditions, the same must be adhered to; ii) If there is no power of general relaxation, ordinarily the same shall not be exercised and the principle of strict compliance would be applied where it is possible for all the parties to comply with all such conditions fully; iii) If, however, a deviation is made in relation to all the parties in regard to any of such conditions, ordinarily again a power of relaxation may be held to be existing iv) The parties who have taken the benefit of such relaxation should not ordinarily be allowed to take a different stand in relation to compliance of another part of tender contract, particularly when he was also not in a position to comply with all the conditions of tender fully, unless the court otherwise finds relaxation of a condition which being essential in nature could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the work; and (e) If the State or its instrumentalities act reasonably, fairly and in public interest in awarding contract, here again, interference by Court is very restrictive since no person can claim fundamental right to carry on business with the Government. 24. Therefore, a Court before interfering in tender or contractual matters, in exercise of power of judicial review, should pose to itself the following questions: (i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone; or whether the process adopted or decision made is so arbitrary and irrational that the court can say: the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached ; and (ii) Whether the public interest is affected. If the answers to the above questions are in negative, then there should be no interference under Article 226. 16. Equally unfruitful is the attempt of learned senior counsel to invoke the doctrine of substantial compliance . Substantial compliance in a contract would occur when the broader objectives of the contract have been met, but technically, not all of the formal requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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